Tax incentives for science and technology enterprises effective as of 2025

Amidst significant transformations in the legal framework for science, technology, and innovation specifically with the promulgation of the Law on Science, Technology, and Innovation No. 93/2025/QH15 (effective October 1, 2025) and Decree No. 320/2025/ND-CP guiding the implementation of the Law on Corporate Income Tax (effective December 15, 2025 science and technology enterprises (S&TEs) are being positioned at the heart of policies encouraging knowledge-based economic development. 

This article analyzes the concept of Science and Technology Enterprises (S&TEs), the relevant legal requirements, and the notable tax incentive framework applicable from 2025. 

1. What is a Science and Technology Enterprise?

In practice, many enterprises believe that merely applying technology to management or business operations qualifies them as a Science and Technology Enterprise (S&TE). However, under current law, an S&TE is a specific legal status, established only when the enterprise satisfies all statutory conditions and is granted a Certificate by the competent state authority. 

Pursuant to the Law on Science, Technology, and Innovation 2025 and Decree No. 268/2025/ND-CP (replacing Decree No. 13/2019/ND-CP), an S&TE is defined as an enterprise established under the Law on Enterprises that carries out production, business, or service provision derived from science and technology results to which the enterprise holds legal ownership or usage rights. 

The two core characteristics for identifying a Science and Technology Enterprise (S&TE) include: 

  1. Rights to science and technology results: The enterprise must hold ownership or the legal right to use science and technology results, such as inventions, utility solutions, plant varieties, software, or recognized research results; 
  2. Commercialization activities: The enterprise must generate products, goods, or services formed directly from such science and technology results, rather than merely engaging in purely commercial activities. 

2. Tax Incentive System for S&TEs

2.1. Tax-exempt income 

Enterprises participating in innovation and digital transformation activities shall be entitled to tax exemptions on specific categories of income: 

  • Income from research and development contracts: Income derived from the performance of scientific research, technological development, innovation, and digital transformation contracts shall be tax-exempt during the contract performance period (for a maximum of 03 years from the date revenue is generated).
  • Income from the sale of new technological products: Income derived from the sale of products manufactured using new technology applied for the first time in Vietnam shall be tax-exempt for a maximum of 03 years from the date revenue is generated from the sale of such products. 
  • Income from pilot production products: Income derived from the sale of pilot production products during the pilot production period in accordance with the law shall also be tax-exempt. 
  • Grants and sponsorships received: Grants and sponsorships received for the purpose of scientific research, technological development, innovation, and digital transformation activities in accordance with the law shall be identified as tax-exempt income. 

2.2. Preferential tax rates and duration of tax exemptions and reductions 

 Enterprises operating in this field are classified as being in investment-incentivized sectors and are entitled to the highest level of incentives: 

 – Incentivized sectors: Including the application of high technologies; venture capital for  high-tech development; high-tech incubation; science and technology enterprises; and  investment projects to produce digital technology products and prioritized  supporting  industry products. 

– Preferential tax rate of 10% for 15 years: Applied to an enterprise’s income derived  from the implementation of new investment projects in the aforementioned sectors  (including science and technology enterprises and innovation enterprises).  

– Tax exemption for 04 years and 50% reduction for the subsequent 09 years: Applied  to an enterprise’s income derived from the implementation of new investment projects in  the sectors eligible for investment incentives as prescribed in Clause 2, Article 18  (including innovation and high technology). 

– Extension of incentive duration: For large-scale or high-tech projects requiring special  encouragement, the Prime Minister may decide to extend the duration of the preferential  tax rate application (but by no more than 15 years). 

2.3. “Super-deduction” mechanism for R&D expenses (A breakthrough update for 2025) 

– Content: Enterprises are entitled to include up to 200% of actual expenditures for  research and development (R&D) activities in their deductible expenses when determing taxable income. 

Example: If an enterprise spends 5 billion VND on R&D, it is entitled to deduct 10  billion VND from its taxable income when calculating tax. This significantly reduces tax  liabilities for its other profitable business activities. 

– Conditions: The enterprise must not incur a loss after applying this additional deduction  and must comply with the provisions of the law on science and technology. 

2.4. Appropriation for Science and Technology Development Funds 

Enterprises may appropriate a Science and Technology Development Fund to serve research and innovation activities. This appropriated amount is deductible when determining taxable income.  

Science and technology enterprises, high-tech agricultural enterprises, and high-tech enterprises are entitled to incentives for income derived from high-tech activities, high-tech applications, and scientific research results. 

3. Conditions and Roadmap for Enjoying Incentives

Step 1: Preparing scientific and technological “assets” 

Enterprises must demonstrate legal ownership or the right to use scientific and technological (S&T) results through: 

– Patent or Utility Solution certificates. 

– Copyright Registration Certificates (for software). 

– Official documents recognizing scientific research results. 

– Legal technology transfer contracts (if the technology was transferred from another  party). 

Step 2: Meeting revenue ratio requirements (According to Decree 268/2025/ND-CP) 

Enterprises must prove that the ratio of revenue derived from S&T products to their total revenue reaches the prescribed threshold. Decree 268/2025/ND-CP (effective October 14, 2025) has classified specific conditions more clearly: 

– Medium-sized enterprises: Revenue from S&T products must account for at least 20%  of the total revenue. 

– Small and micro-sized enterprises: Often exempt from revenue ratio requirements  during the first 5 years of establishment to nurture new ideas. 



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